Why a patent may be more valuable than you think…..

“The problem with having a patent is that if I challenge a multinational in court for breaching my Intellectual Property, then it will cost me a bomb in legal fees. And of course ‘Big Co’ can afford more expensive lawyers than I can afford“.
It is a fairly common comment from Business Owners and Innovators. And of course it is even more expensive if you have cover in Europe, or World Wide.

Of course, Company owned patents are seen as assets when it comes to Company valuations, but this may not be easily reconcilable during day to day business.

The goalposts changed on 1st April 2013, and it is amazing how many innovators and small Business Owners do not know about the Patent Box. Whilst nothing changes regarding the ‘vulnerability of Big Co to try to bypass your patent’, matters have changed regarding the incentives for doing so.

Profits from items with a Patent are now subject to a lower rate of Corporation tax.

So, let us say that 50% of your profits are derived from items with Patent protection, then tax related to this is reduced to 10%. Prior to April 2013, all profits associated to Patents were subject to the higher Corporation Tax rate.

Of course you need to work out the sums in your financial projections to see if it is worthwhile.

If you need help with weighing up the pros and cons, call us, or drop us an e mail. Discretion guaranteed.